Method for enhancing revenue and minimizing charge-off loss for financial institutions

Abstract

In one embodiment, a computer accessible medium stores a plurality of instructions which, when executed: (i) statistically analyze account data corresponding to a plurality of accounts at a financial institution to determine which account data items are most strongly correlated to a charge-off event in an account (and/or a fee revenue event, in some embodiments); (ii) generate one or more factors for one or more equations corresponding to the plurality of accounts, the one or more factors weighting the account data items according to relative correlation to the charge-off event; and (ii) evaluate the one or more equations for the plurality of accounts and establish an account feature for each of the plurality of accounts responsive to the evaluation. For example, the account feature may be the overdraft limit.

1 . A computer accessible medium storing a plurality of instructions which, when executed: 
 statistically analyze account data corresponding to a plurality of accounts at a financial institution to determine which account data items are most strongly correlated to a charge-off event in an account;    generate one or more factors for one or more equations corresponding to the plurality of accounts, the one or more factors weighting the account data items according to relative correlation to the charge-off event; and    evaluate the one or more equations for the plurality of accounts and establish an account feature for each of the plurality of accounts responsive to the evaluation.    
     
     
         2 . The computer accessible medium as recited in  claim 1  wherein the account data comprises account activity data.  
     
     
         3 . The computer accessible medium as recited in  claim 2  wherein the account data further comprises additional data derived from the account activity data, wherein the plurality of instructions, when executed, derive the additional data.  
     
     
         4 . The computer accessible medium as recited in  claim 1  wherein the account feature comprises a dollar amount of overdraft privilege provided for the account.  
     
     
         5 . The computer accessible medium as recited in  claim 4  wherein the one or more equations are designed to reduce the dollar amount if the probability of the charge-off event increases.  
     
     
         6 . The computer accessible medium as recited in  claim 4  wherein the one or more equations are designed to increase the dollar amount if the probability of the charge-off event decreases.  
     
     
         7 . The computer accessible medium as recited in  claim 1  wherein the correlation is measured by logistic regression and chi-squared.  
     
     
         8 . The computer accessible medium as recited in  claim 1  wherein the plurality of instructions, when executed, statistically analyze the account data to determine which account data items are most strongly correlated to a fee revenue event in an account.  
     
     
         9 . The computer accessible medium as recited in  claim 8  wherein the one or more equations attempt to control the account feature to increase fee revenue and to decrease charge-off expense.  
     
     
         10 . A computer system comprising: 
 the computer accessible medium as recited in  claim 1;  and    at least one processor configured to execute the plurality of instructions.    
     
     
         11 . A computer accessible medium storing a plurality of instructions which, when executed: 
 statistically analyze account data corresponding to a plurality of accounts at a financial institution to identify account data items that strongly correlate to at least one selected account event;    dynamically generate one or more factors for one or more equations specific to the plurality of accounts based on results of the statistical analysis; and    evaluate the one or more equations to establish a dollar amount of overdraft privilege for each of the plurality of accounts.    
     
     
         12 . The computer accessible medium as recited in  claim 11  wherein the one or more equations attempt to increase a probability of fee revenue and decrease a probability of the selected account event.  
     
     
         13 . The computer accessible medium as recited in  claim 12  wherein the selected account event is a charge off event.  
     
     
         14 . The computer accessible medium as recited in  claim 12  wherein the selected account event is a fee revenue event.  
     
     
         15 . A method comprising: 
 statistically analyzing account data corresponding to a plurality of accounts at a financial institution to determine which account data items are most strongly correlated to a charge-off event and which account data items are most strongly correlated to a fee revenue event in an account; and    generating one or more factors for one or more equations corresponding to the plurality of accounts, the one or more factors weighting the account data items according to relative correlation to the charge-off event or the fee revenue event.    
     
     
         16 . The method as recited in  claim 15  further comprising evaluation the one or more equations for the plurality of accounts and establish an account feature for each of the plurality of accounts responsive to the evaluating.  
     
     
         17 . The method as recited in  claim 16  wherein the account feature is a dollar amount of an overdraft privilege.  
     
     
         18 . The method as recited in  claim 15  further comprising statistically analyze the account data to determine which account data items are most strongly correlated to a fee revenue event in an account.  
     
     
         19 . The method as recited in  claim 18  wherein the one or more factors combine results of the statistical analyzings.  
     
     
         20 . The method as recited in  claim 19  wherein the one or more equations attempt to control the account feature to increase fee revenue and to decrease charge-off expense.